How to support multiple login scenarios in multi-tenanted Azure Active Directory (AAD) - azure-active-directory

Question

Our application (referred to as "XYZ_App" below) is a multi-tenant SaaS application. We are in the process of making it available for Microsoft AppSource as a multi-tenanted "Web app / API" (referred to as "AppSourceXYZ_App" below).
We started our OpenID Connect implementation with endpoints pointing to “common” as per stated in the documentation when multi-tenancy is desired/required.
In XYZ_App, we added information in the system to know what AAD instance each XYZ_App tenant is associated with (using the GUID Microsoft assigned to this AAD instance, we are NOT using the "rename-safe.onmicrosoft.com" representation).
When using the “common” endpoints, we had to manually validate the issuer from the JWT to make sure it was the expected one: a user could access XYZ_App requesting access to XYZ_App’s tenant associated with contoso.onmicrosoft.com, get directed to “login.microsoftonline.com/common” to authenticate and then decide to authenticate with a user from another AAD instance (referred to as "anotherAADInstance.onmicrosoft.com" below). In this scenario, even though a user could successfully authenticate on anotherAADInstance.onmicrosoft.com, XYZ_App’s redirect URI must make sure the JWT issuer is the one from contoso.onmicrosoft.com. I’ll refer to this setup as Scenario_1.
With that scenario in mind, we thought about NOT using “common” and customize the requests going to login.microsoftonline.com on the fly; attempting to “jail” requests to be forced to authenticate against a specific AAD instance. We would still need to perform our validation in the redirect URI to make sure the issuer is the appropriate one, but we thought this approach might make our lives easier. I’ll refer to this setup as Scenario_2.
Do you envision Scenario_2 is viable in the long run or is it too short-sighted ? Based on my current knowledge of OpenID Connect, one limitation I can see with Scenario_2 is that it would become problematic to support “broker accounts” into our app.
Explanation of “broker accounts”: in our industry, some external users are allowed access to the system. Let’s say I have a company called “BrokerCo” (with their own brokerco.onmicrosoft.com AAD instance) who has 2 employees: Broker1 and Broker2. BOTH anotherAADInstance and contoso hired Broker1 and Broker2 to get broker services to perform tasks in XYZ_App; requiring XYZApp to grant them access. What is the ideal way for authentication from an OpenID Connect standpoint ? If XYZ_App were to use “login.microsoftonline.com/common” for authentication (like in Scenario_1; as opposed to “jailed” access like in Scenario_2), Broker1 and Broker2 could authenticate with brokerco.onmicrosoft.com (no AAD "External users" for anotherAADInstance nor contoso), but they would then get to redirect URI with an issuer that is different than what XYZ_App’s anotherAADInstance and contoso tenants are configured for... I feel like I’m back to square 1...
Do you have suggestions or pointers to solve this issue ?
Background context:
While playing with OpenID Connect issuers, I got the following error message:
AADSTS50020: User account 'testuser#anotherAADInstance.onmicrosoft.com' from identity provider 'https://sts.windows.net/XXXXXXXX-fake-GUID-9bZZ-XXXXxxxxXXXX/' does not exist in tenant 'XYZ Publisher' and cannot access the application 'YYYYYYYY-fake0-GUID-YYYYyyyyYYYY' in that tenant. The account needs to be added as an external user in the tenant first. Sign out and sign in again with a different Azure Active Directory user account.
Thanks in advance !

Answer 1

Your question has multiple layers, trying to address most of them:
AppSource is about trial experiences for new users: this mean that any corporate account around the globe can potentially be an user of your SaaS application - or at least to the trial experience of your application, therefore the first thing you need to think when integrating with AppSource is how easy it has to be for a potential user to experience your app for the first time.
With that in mind, AppSource recommends that the trial of application is build on such a way that allows any user from any organization to sign-in, and therefore a multi-tenant approach for your application is the recommended setup for any application.
The single-tenant approach requires more control on your side, and for a trial experience - it means that the user cannot try your application right away because the operation you have to do on your single-tenant application is to add the user to an Azure Active Directory tenant as a guest user. This guest account will need then to wait receiving an email to accept the invitation to join to this tenant you are adding the user to then sign-in to your application.
Therefore your scenario 1 is the best scenario thinking on a trial experience in general, and also in general require less management (as you'd not need to create/ manage each individual account that needs to access your application as guest users of your Azure AD instance).
However some concerns you listed - that this scenario bringing are valid: Because you are accepting the common endpoint, you are saying basically that any user can sign-in to any tenant to your application, and this may not be desirable. In addition, the scenario you listed that a user can generate a token for any application is also valid, however, you can add additional checks to make this more secure and that any token generated by another authentication is blocked:
You can validate the 'audience' claim to guarantee that the token was issued to your application
You can eventually check the 'tid'/'iss' claims against of a list of tenant Ids in your database to see if that the user's organization is a valid organization in your application -- this would be valid for non-trial users/ organizations.
More information in this article.
About scenario '2' and broker accounts:
This scenario could be interpreted in two different ways:
Broker accounts are guest accounts of a customers' Azure AD tenant
Broker accounts are third party accounts but are not actually added as a user of anotherAADInstance or contoso AD
If your case is '1' then you're right: if your application needs to authenticate guest users that belong to another Azure AD tenant, then common endpoint could not be used directly.
If your case is '2' then what you'd need to do is to continue using the common endpoint and somewhat after the user is authenticated ask them to choose the company. I am describing this on generic terms without fully understanding this scenario. Perhaps this is not simple as you want the remote company to control this and not the user - so some additional complexities may need to be handled here.
A note is that if your scenario is scenario 1. - in theory - you can still use an hybrid approach, where you'd ask user to type the username inside the application and the company that they want to sign-in, then check if you need to validate the user against common or tenant-id endpoint, preparing the request and then sending a login_hint argument when authenticating. More information here